I have always enjoyed the stories about speculative insanity in Mackay’s Extraordinary Popular Delusions and the Madness of Crowds. I was surprised to read the New York Times reporting that nothing has changed in the last century and a half. First, here is a famous snippet from the book:
Mackay, Charles. 1852. Extraordinary Popular Delusions and the Madness of Crowds (NY: Noonday, 1932).

55: One projector set up a company to profit from a wheel for perpetual motion. Another projector proposed “A company for carrying on an undertaking of great advantage, but nobody to know what it is.” “Next morning, at nine o’clock, this great man opened an office in Cornhill. Crowds of people beset his door, and when be shut up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid. He was thus, in five hours, the winner of 2000 pounds. He set off the same evening for the Continent. He was never heard of again.”

“Some investors no longer even need to hear about a company to hand out money. Jakob Lodwick, an entrepreneur and co-founder of Vimeo, recently raised $2 million simply on the promise that he might have a good idea for a company in the near future.”

At a time when finance is coming under intense scrutiny, it is heartening to learn about hedge funds’ concern about human rights. Greece is wrestling with the idea of asking (forcing) investors to accept 32 cents on the dollar. Hedge funds have been buying up the paper in the expectation that they can force Greece to pay in full.

Now the hedge funds is toying with the idea to sue the country in the European Court of Human Rights on the grounds that Greece had violated bondholder rights, surely a more serious matter than the slaughter of a few dissidents demanding democracy.

At least we now know that capital is seriously concerned about more than maximizing profits.

“No man of spirit will consent to remain poor if he believes his superiors to have gained their goods by lucky gambling. To convert the business man into a profiteer is to strike a blow at capitalism, because it destroys the psychological equilibrium which permits the perpetuance of unequal rewards. The economic doctrine of normal profits, vaguely apprehended by everyone, is a necessary condition for the justification of capitalism. The business man is tolerable so long as his gains can be said to bear some relation to what, roughly and in some sense, his activities have contributed to society.”

A young veteran as just arrested for murdering homeless people in Los Angeles. Regardless whether he is actually guilty, a large number of terrible acts have been committed by returning veterans traumatized from the war. None of the studies of which I’m aware account for such costs (including the cost of imprisoning them) in their war costs.

This weekend, the Wall Street Journal mentioned two recent studies in psychology, suggesting how people can become conditioned to function better in our increasingly inhuman capitalist society. The first indicates that soldiers who played violent video games apparently were able to numb themselves from the horrors that they witnessed.

The second article found that religious people were more inclined not to discount the future as much; in effect, they were more future oriented or, as Joe Hill used to say, more concerned with pie in the sky. For two and a half centuries, economists, such as Adam Smith, tended to attribute people who attained status as a capitalist to their capacity to be more future oriented. Max Weber, and to some tiny extent, Marx himself tended to attribute the development of capitalism to Protestantism.

Apparently, to the extent we can train cannon fodder with violent video games and inculcate the rest of us with religion, we can succeed in maintaining an empire with a patient civilian population, who will be content to sit by until neoliberal policies can ultimately deliver pie-in-the-sky.Continue reading →

I had about $500 worth of electronics gear stolen from my luggage in June. I spent several hours figuring out how to download the claim forms. After I filled them out, I got a brief note indicating that they received my submission.

Then I heard nothing. I spent many hours — my guess is more than 20, mostly spent on wait times — trying to contact somebody. I could get to an Indian call center, which could not give me any information on what to do.

After several months, I was informed that I had not included the tag from my baggage, which I did. I resent it. Many weeks later, I learned that I never sent it according to their records. After several iterations, I learned that my claim was denied because the company never received the tags.

A lawyer friend sent a letter to United. Now in January, I received a letter informing me that United does not accept responsibility for lost electronics.